KIRKLAND LAKE - Kirkland Lake has approved a borrowing authority of $4 million for 2024.
Council approved the borrowing authority, which is only used if the town doesn't have enough cash to pay for its obligations during the year, at its Jan. 24 meeting.
“This authorizes us to use up to $4 million of credit to augment our cash supply. That's the theory,” said treasurer Lloyd Crocker.
“We’re very healthy right now in cash. It's hard to imagine a scenario where we'd need to use the borrowing authority, but we need to put it in place just in case something happened.”
Lloyd said if ever a situation came up where they needed to borrow all or part of the $4 million, council would have to approve it.
The municipal act allows a municipality to borrow money that the council considers necessary until the taxes are collected and other revenues are received.
Municipalities can borrow no more than 50 per cent of the budgeted revenues for the year. After Sept. 30, the loan amounts cannot exceed 25 per cent of budgeted revenues.
Coun. Rick Owen said historically, councils have done this.
“And the explanation they've given us as we're waiting for taxes to come in, we may have a shortfall because the tax money hasn't come in yet. So, this is a safeguard so that we can pay our bills and continue operating until the tax revenue comes in and then the tax revenue goes to pay off the money we borrow,” he said.
“As far as I know, as far as I can recall from my reporting days, I don't think it's ever been used. It's always been passed, but I can't remember in the last say 10 years where council's needed to use it.”
